THUNDER BAY – MINING – Cliffs Natural Resources Inc. (NYSE: CLF) has entered into a definitive agreement to sell its Logan County Coal assets in southern West Virginia to Coronado Coal II LLC for US$175 million in cash and the assumption of certain liabilities. Cliffs anticipates using the cash proceeds from the sale for debt repayment.
Lourenco Goncalves , Cliffs’ Chairman, President and Chief Executive Officer said, “I am very pleased to be able to sell these assets to Coronado Coal, an experienced West Virginia-based coal operator. This transaction is another important step in executing our strategy to transform Cliffs into a stronger, pure-play U.S. iron ore supplier.”
Additionally, the transaction will provide employment opportunities for many of the current Logan County Coal employees to become part of the Coronado Coal team. Cliffs other U.S. coal assets, Oak Grove mine in Alabama and Pinnacle mine in West Virginia, are unaffected by this transaction. The Company stated that it will continue to explore sale options for its other coal assets.
Completion of the sale to Coronado Coal II LLC is subject to a number of conditions including customary regulatory approvals. The parties expect to close the transaction by year-end 2014 and Cliffs expects to record a loss on the sale of assets in the range of approximately $375 million to $425 million on a pre-tax basis in the fourth quarter of 2014.
Deutsche Bank Securities Inc. acted as financial advisor and Hahn Loeser & Parks LLP acted as legal advisor to Cliffs Natural Resources Inc.